Economic Times, June 25, 2012
By Pradeep S Mehta
The world is in turmoil and so is India, but for different reasons. The common denominator is that bad governance everywhere is the main reason for the apocalypse. Europe is fighting a financial crisis resulting from profligacy of some countries. However, because of their interconnectedness, other countries are trying to salvage the situation. Few other parts of the world, such as the Arab world, too are not at peace or stable. In India, we have an elected government, but rudderless, and an Opposition that is suffering from sclerosis. There is severe polity paralysis and policy stasis, sprinkled with a dose of profligacy. While many politicians are busy in making money in partnership with civil servants and businessmen, most of our people are suffering from the adversity. Not all politicians or civil servants or businessmen are crooked, so it would be unfair to use a paintbrush. But all of us are frustrated and agitated with the alarming situation, and are hugely worried.
Our growth rates are plunging and it does not need any explanation – much is being said in the media. The outcomes will lead to a big dip in our economy and the poor will suffer the most. To come out of a depression, it takes much longer than going downhill. Recently, Fitch, the global rating agency, has downgraded India’s creditworthiness to negative citing corruption, slow growth, inadequate reforms and inflation. Earlier, Standard and Poor’s too had downgraded India from stable to negative.
Both crony capitalism and political patronage are responsible for the decline. Crony capitalism, particularly in the natural resource sector, is humongous, and the government’s showcase methods of arresting the disease cannot succeed. All social welfare schemes such as MGNREGA or the public distribution system are but milch cows for the grassroots polity. Some benefits do accrue to the deserving but the lion’s share goes to the undeserving. Social audit projects under MGNREGA have faced serious problems from the local polity and babus, because it exposes them and will pre-empt further rents. Even the proposal for state funding of elections is not necessarily the best solution, because it cannot overcome greed and avarice that is the cause for increasing corruption.
The rot begins from the top, which Rajeev Chandrasekhar, member of Parliament and former Ficci president, has argued convincingly in an electronic debate run by CUTS FunCompForum. The buck stops at the PM, and he cannot claim innocence. Among other specific laws, the Indian Penal Code, 1860, inter alia covers acts of both commission and omission by public servants, which includes ministers. There are just two general exceptions to the code: if a police officer arrests someone in the process of committing a crime without a warrant, or if the person is a child below the age of seven years.
None of the misdemeanours have been committed by seven-year-olds, but by mature people, many of whom have sworn an oath to uphold the Constitution. Alas, some have been arrested but convictions are yet to happen, while most go around without any fear.
On the other hand, corruption campaigners are being vilified on the ground that their organisations receive foreign funding. Even Magsaysay awardees are being labelled as being suspect because the noted Philippines-based Magsaysay Foundation gets financial support from US-based charities. This is just stretching it too far and is plainly ludicrous. Organisations getting foreign funding are under the microscope of the government, but they certainly have not sold their souls for a few pennies. But politicians and others have salted away their ill-gotten wealth abroad, and the debate for getting the money back home goes on without any sight of resolution.
But there is some good news too: our savings rate continues to hover around a healthy 30%, which enables higher gross capital formation and that there are no major policy reversals. Many good things have also been done during the last few years. Notwithstanding the increasing menace of the Naxalite movement, restoring some balance in our governance systems on tribals and minorities, otherwise the social unrest could have been more costly for our economy.
To deal with corruption, the RTI Act and the Aadhaar scheme are proving helpful. Some states have also enacted laws for assured access to basic services and fast-track courts with the power to seize corrupt persons’ properties. All new initiatives will face hurdles but one need not be sceptic about them.
Finally, we cannot find one particular medicine for the malaise, as cancer cannot be treated by an aspirin, but needs special treatment. There is need for rejuvenation and it has to be done by connecting all the dots. Importantly, trust between the people and government has been shrinking. Only if trust is restored, people will respond positively and raise production.
Fourteen eminent citizens wrote twice to the PM and others in January and October 2011 on the seriousness of the corruption pandemic with suggestions to deal with the issues and restoration of trust. ET carried a month-long debate, Agenda for Renewal, and several eminent people contributed to it.
It is time to revisit the debate so that a healthy peaceful campaign can be run in the country, to enable us to get out of this morass and restore trust before it is too late.
The author is secretary general of CUTS International
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